Glenn Freeman: In this edition of "Ask the Expert" I'm speaking to Bryce Anderson from Morningstar Investment Management.

Bryce, thanks for your time today.

Bryce Anderson: No problem.

Freeman: Now, we are speaking about equity markets and specifically, the US which – we've heard a lot about the decline in 2018. How much did it actually fall over the course of the calendar year?

Anderson: Yeah. So, it declined just shy of 5 per cent for the year. But that really doesn't tell the whole story. So, most of that decline happened in the final quarter. In fact, in the final quarter, it was double-digit falls. What drove that? So, that was on the back of a number of factors really. So, issues around expectations of interest rates in the U.S., the trade wars, Brexit and a couple of other things led to investor sentiment turning bearish very quickly.

Freeman: And what happened in the first quarter of this year? I mean, we've seen it's bounced back quite a bit. And how has this played into your allocation to US equities?

Anderson: So, it really has been a stunning reversal for markets globally and specifically, the US I think today the US is up 16.5 per cent year-to-date. So, it's basically got back all those declines. And what's driven that? Changes in investor sentiment, I think, specifically around US interest rates. So, I think a number of the factors that it talked about around what cause a decline are still there, but it's the interest rate expectations that have driven, I guess, the relief rally what I would call.

Freeman: And then, when we spoke in January, in terms of valuations, you were talking about the US as being – overall, it was still pretty expensive, but there were some areas and some specific sectors that were appealing. What's your view now on that?

Anderson: Yeah. So, as valuation-driven investors, we look at valuations as our major focus, forward-looking expectations of returns. And whilst through quarter four in 2018 the US market in aggregate got cheaper and I guess that seems to reverse, in aggregate, the markets looks expensive to us, much as it did before the sell-off.

But to your point around, if you open the bonnet and look beyond just the headline level, there are some select opportunities in the US. US consumer staples continues to pay something that we have exposure to and like to have in the portfolio because of not only it's reasonable valuation, but the different things it brings to our portfolios in terms of the defensive earnings of those companies.

Freeman: And some companies within the financials, energy, and within the telecommunications, it was what you were speaking about last time as well. That remain – there are still areas you're looking at?